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Deutsche Bank June 14th, 2016
Christian MULLIEZ Chief Financial Officer
L’Oréal
1
L’Oréal: A unique set of core strengths
2
Pure player in
beauty
since 1909
3 Deutsche Bank - 14 June 2016
Beauty market growth
Pure player in a compelling industry*
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016E
5.0%
3.0%
2016 est.
+3.5%
*L’Oréal BMS estimates - excluding soap, toothpaste and razors. Net manufacturing price (sell-in) - provisional estimate. Growth at constant exchange rate
4
≃
Deutsche Bank - 14 June 2016
Leader of the cosmetics industry worldwide
Deutsche Bank - 14 June 2016 5
28.02
20.47
17.60
11.10
7.11 5.89 5.57 5.24 5.20 5.04 5.01 4.94 4.60
4.28
4.04
0
5
10
15
20
25
30
L'Oréal Unilever* P&G* EstéeLauder*
Shiseido* Beiersdorf* J & J* Chanel* Avon* Kao LVMH AmorePacific*
LimitedBrands*
Coty Henkel
Sale
s (
in U
S$ b
n)
WWD Beauty Biz Ranking April 2016
2015 Sales
“Beauty’s Top 100”
in US dollars
* Estimates
Spanning channels and categories
6
Hair Care Hair Colour Skin Care Fragrance Make-up
Across all
beauty
categories
Hair & Beauty
Salons Mass Market
Department
stores
Perfumeries
Travel Retail
Pharmacies
Drugstores
Medispas
Branded
boutiques E-commerce
Across all
distribution
channels
Deutsche Bank - 14 June 2016
Unparalleled R&I capability
7 Deutsche Bank - 14 June 2016
A unique portfolio of complementary brands
The Body Shop 3.8%*
Professional Products 13.5%*
Consumer Products 46.9%*
Active Cosmetics 7.2%*
L’Oréal Luxe 28.6%*
*As a % of 2015 consolidated sales
8 Deutsche Bank - 14 June 2016
Key indicators 2015
9
€25.26 billion sales in 2015
12.5% market share*
140 countries
82 881 employees
17.4% operating margin
€6.18 EPS**, +15.7%
3rd worldwide advertiser***
* BMS: L’Oréal estimates; ** Diluted earning per share based on net profit of continuing operations excluding non-recurring items, after non-controlling interests
*** Adage ranking– 2014 Deutsche Bank - 14 June 2016
Actively pushing our transformation
10
Building the new L’Oréal
More… Universal Digital Sustainable
NEW L’ORÉAL
11 Deutsche Bank - 14 June 2016
Digital & beauty: the perfect match
Deutsche Bank - 14 June 2016 12
4.5bn - - - - - -
Beauty queries
yearly
55m - - - - - -
Beauty
followers
700m - - - - - -
Beauty
addicts
45bn - - - - - -
Beauty videos
views yearly
Boosting our digital capabilities
Deutsche Bank - 14 June 2016 13
> 1 000 digital specialists
A worldwide digital upskilling
program
Digital at the heart of all touch points
Deutsche Bank - 14 June 2016 14
25% of media
invested in digital
Enhancing
brand desirability
Precision
advertising
Social
listening
Deutsche Bank - 14 June 2016
Connecting
with digital
pioneers
*
* On 12th may 2016, L’Oréal announced a strategic investment Founders Factory, leading global multi sector digital accelerator and incubator,
based in London.
Building leadership in e-commerce
Deutsche Bank - 14 June 2016 16
China CPD:
More than 20% of
sales in e-commerce**
€1.3bn e-commerce sales*
>5% of total group sales
*Sales achieved on our brands' own websites + estimated sales achieved by our brands corresponding to sales through retailers’ websites (non audited data)
** Consumer Products Division in China, 2015
17
Sharing Beauty With All
Sustainable development as a strategic pillar
A comprehensive program with ambitious
2020 targets
2015 a milestone year
Sharing Beauty With All
2015 progress report
Deutsche Bank - 14 June 2016 18
(1) These indicators reflect marketed products that are new or renovated in terms of formula or packaging and made for the first time in 2015. The calculation is based on a scope, which, at the end of 2015, corresponds to
85% of volumes produced by the group and which includes all product categories, excluding range extensions; vs. 67% in 2014.
(2) The percentage reduction is calculated in absolute terms for scopes 1 and 2 in line with the GHG Protocal standard; vs. 50% in 2014.
(3) Calculated as a percentage of consolidated sales 2014; vs. 25% in 2014 calculated as a percentage of consolidated 2013 sales.
74%
Sustainable Innovation
of new or renovated products
have an improved environmental or social impact (1)
-56%
Sustainable Production
reduction in CO2 emissions in factories and distribution centers since
2005, while production increased by 26%(2)
34%
Sustainable Consumption
of brands have implemented initiatives to raise consumer awareness (3)
100%
2020 targets
100%
-60%
Sharing Beauty With All
2015 progress report
Deutsche Bank - 14 June 2016 19
87%
Employees
of the group’s permanent employees have healthcare coverage reflecting best practices in their country of residence (1)
57 200
Communities
people accessed work through the
Solidarity Sourcing programme, including 22 400 through TBS’s Community Fair Trade initiative (3)
51%
Suppliers
of the group’s strategic suppliers have been evaluated and selected
based on CSR performance (2)
Sharing our growth with…
(1) This indicator is calculated according to the group’s overall scope (Total Divisions and The Body Shop), representing 100% of employees for the scope of the L’Oréal Share & Care programme; vs. 85% in 2014.
(2) vs. 43% in 2014.
(3) vs. 52 000 in 2014, including 25 000 via Community Fair Trade.
100 000
2020 targets
100% 100%
Confidence in the future outlook
20
A solid first quarter 2016
21
% change
Q1-2016
(in million €) Like-for-like Reported
Professional Products 854.3 +2.5% +0.2%
Consumer Products 3 106.0 +3.9% +0.9%
L’Oréal Luxe 1 831.4 +5.5% +4.4%
Active Cosmetics 560.7 +4.5% +0.3%
Cosmetics Divisions Total 6 352.4 +4.2% +1.7%
The Body Shop 200.1 +2.1% +4.0%
Consolidated Total 6 552.4 +4.2% +1.8%
Q1-2016 consolidated sales by division
Deutsche Bank - 14 June 2016
A solid first quarter 2016
22
% change
Q1-2016
(in million €) Like-for-like Reported
Western Europe 2 127.5 +2.0% +1.3%
North America 1 715.9 +4.3% +5.8%
New Markets 2 509.0 +6.1% -0.5%
of which:
- Asia, Pacific 1 510.4 +4.5% +2.3%
- Latin America 409.0 +8.5% -11.1%
- Eastern Europe 390.6 +9.5% -1.5%
- Africa, Middle-East 198.9 +8.0% +5.4%
Cosmetics Divisions Total 6 352.4 +4.2% +1.7%
Q1-2016 cosmetics divisions sales by region
Deutsche Bank - 14 June 2016
Consumer Products division Accelerating growth
1 - - - - - -
Renewing
core brands
3 - - - - - -
Maximising
innovation
4 - - - - - -
Making the
most
of digital
2 - - - - - -
Leveraging
global beauty
trends
23
>4% MS
in the UK
Goes global -----
20 countries in
2016
Sources: mass panel from Nielsen, YTD P4.
Deutsche Bank - 14 June 2016
L’Oréal Luxe Keeping the strong pace of growth
Deutsche Bank - 14 June 2016
Armani YSL
Victor & Rolf
Ralph Lauren Diesel
Cacharel Maison Margiela
Proenza Schouler
“New Luxury” Brands
Fashion Beauty brands
Histor ical Beauty brands
Urban Decay Kiehl’s
Clarisonic Shu Uemura
Biotherm
Yue Saï H. Rubinstein
Lancôme
24
Active Cosmetics Continued growth & leadership
Deutsche Bank - 14 June 2016
1 - - - - - -
A desire for
safety
naturalness
simplicity
3 - - - - - -
Health
conscious
consumers
4 - - - - - -
Worldwide
ageing
population
2 - - - - - -
Search for
effective
solutions
25
Professional Products division Strengthening leadership & boosting the market
Deutsche Bank - 14 June 2016 26
Outperform the cosmetics market Achieve another year of sales and profit growth
2016 ambition
27 Deutsche Bank - 14 June 2016
Beauty market growth*
The beauty market continues to develop…
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016E
5.0%
3.0%
2016 est.
+3.5%
*L’Oréal BMS estimates - excluding soap, toothpaste and razors. Net manufacturing price (sell-in) - provisional estimate. Growth at constant exchange rate
28
≃
Deutsche Bank - 14 June 2016
…and it will continue to grow
New desires - - - - -
Digital
New needs - - - - -
Urbanisation
New targets - - - - -
Seniors
Men
New consumers - - - - -
Middle Class
29 Deutsche Bank - 14 June 2016
Global acceleration of make-up
Deutsche Bank - 14 June 2016 30
USA Turkey China
Mature
make-up market - - - - -
>20% of beauty
+7% in 2015*
Moderately developed
make-up market - - - - -
≈15% of beauty
+16% in 2015*
High potential
make-up market - - - - -
10% of beauty
+8% in 2015*
* 2015 market growth at constant exchange rate
Make-up leader with unique expertise and
powerful brand portfolio
Deutsche Bank - 14 June 2016 31
* Like-for-like growth.
+11% 2015 Sales*
Leader in beauty with high potential
32
No1
North America
13.7%
No1
Western Europe
19.6%
No1
Eastern Europe
12.5%
No8
Japan
2.2% No1
Asia Pacific
9.3% excl. Japan
No2
Africa Middle-East
11.8% (in countries
where L’Oréal is present)
No4
Latin America
8.8%
12.5%
8.5%
L’ORÉAL “World”: “New markets”:
*Excluding soaps, razors, blades and toothpastes - L’Oréal Estimates BMS. Ranking based on Euromonitor 2015 figures.
L’Oréal’s market share by region in 2015*
Deutsche Bank - 14 June 2016
A consistent strategy of targeted acquisitions
0
2 000
4 000
6 000
8 000
10 000
12 000
14 000
16 000
18 000
20 000
22 000
24 000
26 000
19
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14
20
15
Consolidated sales (€m)
IFRS norms from 2004
0
33 Deutsche Bank - 14 June 2016
A strong and balanced business model
= +20bp +10bp
22.7% 18.9% 19.7%
Western Europe
North America
New Markets
-10bp -20bp +20bp +10bp 20.0% 20.1% 20.7% 22.8%
Professional Products
Consumer Products
L’Oréal Luxe
Active Cosmetics
(as a % of sales)
*Before central group expenses, fundamental research expenses, stock-option & free grant of shares expenses and miscellaneous items – as a % of total cosmetics divisions sales.
**Total cosmetics divisions.
2015 operating margin by division*
(as a % of sales)
2015 operating margin by region*
20.5%**
34 Deutsche Bank - 14 June 2016
A balanced geographical presence
Deutsche Bank - 14 June 2016
Western Europe 33.1%
New markets 39.5%
North America 27.4%
Western Europe 33.1%
Africa, Middle-
East 3.0% Japan
1.7% Asia-Pacific
excl. Japan 20.8%
Eastern Europe 6.3%
Latin America
7.7%
North America 27.4%
*Cosmetics divisions total
Breakdown of 2015 sales by region*
35
A long term successful business model 19
85
19
86
19
87
19
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89
19
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*Net operating profit, excl. non-recurring items attributable to owners of the company, with Synthélabo consolidated fully up to 1998; net profit excl. non-recurring items attributable to owners of the company, with Sanofi-
Synthélabo equity consolidated from 1999 to 2004; net profit excl. non-recurring items attributable to owners of the company including Sanofi dividend from 2004; IFRS since 2005
x31 In 30 years
3 490
113
Net profit since 1985* (in million euros)
36 Deutsche Bank - 14 June 2016
Dividend per share since 1963 (in euros)
0.008 0.025 0.097
0.44
0,00
0,50
1,00
1,50
2,00
2,50
3,00
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
*Approved at the shareholders’ meeting held on April 20th, 2016
1.80 €2.70
€3.10*
2014 2015
+14.8%
2015 dividend per share
Loyalty Bonus +10%* Dividend increase for shareholders
who have continuously held shares in registered
form for at least two years
3.10*
37 Deutsche Bank - 14 June 2016
L‘Oréal: the “anti-VUCA”
Volatile Uncertain Complex Ambiguous
Strong cash flow
Growing dividend
L'ORÉAL
The “anti-VUCA” Solid &
sustainable growth
Further market share
gains
Profitability increase
38 Deutsche Bank - 14 June 2016
-------------------------Avertissement / Disclaimer ------------------------- « Ce document ne constitue pas une offre de vente ou la sollicitation d’une offre d’achat de titres L’Oréal. Si vous souhaitez obtenir des informations plus complètes concernant L’Oréal,
nous vous invitons à vous reporter aux documents publics déposés en France auprès de l’Autorité des Marchés Financiers (également disponibles en version anglaise sur notre site Internet
www.loreal-finance.com).Ce document peut contenir certaines déclarations de nature prévisionnelle. Bien que la Société estime que ces déclarations reposent sur des hypothèses
raisonnables à la date de publication du présent communiqué, elles sont par nature soumises à des risques et incertitudes pouvant donner lieu à un écart entre les chiffres réels et ceux
indiqués ou induits dans ces déclarations.»
"This document does not constitute an offer to sell, or a solicitation of an offer to buy, L’Oréal shares. If you wish to obtain more comprehensive information about L’Oréal, please refer to the
public documents registered in France with the Autorité des Marchés Financiers (which are also available in English on our Internet site: www.loreal-finance.com).This document may contain
some forward-looking statements. Although the Company considers that these statements are based on reasonable hypotheses at the date of publication of this release, they are by their
nature subject to risks and uncertainties which could cause actual results to differ materially from those indicated or projected in these statements."
39 Deutsche Bank - 14 June 2016
Sophie Gasperment Group General Manager, Financial Communication
Strategic Prospective
Tel.: + 33 1 47 56 86 22
email: sophie.gasperment@loreal.com
Françoise Lauvin Head of Investor Relations
Tel.: + 33 1 47 56 86 82
email: francoise.lauvin@loreal.com
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